UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-Q

            QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended:           JANUARY 31, 2006
                                       or
            TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________________ to _________________________

                         Commission File Number: 0-22011
                                                 -------
                                BIONUTRICS, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

            NEVADA                                        86-0760991
-------------------------------                     ---------------------
(STATE OR OTHER JURISDICTION OF                         I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION)                      IDENTIFICATION NUMBER

2575 E. CAMELBACK RD., SUITE 450  PHOENIX, ARIZONA         85016
--------------------------------------------------      ----------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                (ZIP CODE)

                                  602-508-0112
              ----------------------------------------------------
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)


       Indicate by check mark whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

                                                                Yes [X]  No [ ].

       Indicate by check mark  whether  the  registrant  is a large  accelerated
filer,  an accelerated  filer,  or a  non-accelerated  filer.  See definition of
"accelerated  filer and large  accelerated  filer" in Rule 12b-2 of the Exchange
Act. (Check one):

Large accelerated filer [ ]   Accelerated Filer [ ]   Non-accelerated filer [X]

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).                                Yes [ ]  No [X].

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

As of March 6, 2006, there were 22,681,725 shares of common stock outstanding.
<PAGE>


                                BIONUTRICS, INC.
                            INDEX TO QUARTERLY REPORT
                                  ON FORM 10-Q


                                                                            PAGE
PART I - FINANCIAL INFORMATION

ITEM I.  Financial Statements

                          (UNAUDITED)
         Condensed Consolidated Balance Sheets                                 3
         Condensed Consolidated Statements of Operations                       5
         Condensed Consolidated Statements of Cash Flows                       6
         Notes to Condensed Consolidated Financial Statements                  7

ITEM 2.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations                                            12

ITEM 3.  Quantitative and Qualitative Disclosures About Market Risk           17

ITEM 4.  Controls and Procedures                                              17


PART II - OTHER INFORMATION

ITEM 1.  Legal Proceedings                                                    17

ITEM 1A. Risk Factors                                                         17

ITEM 2.  Unregistered Sales of Equity Securities and Use of Proceeds          18

ITEM 3.  Defaults upon Senior Securities                                      19

ITEM 4.  Submission of Matters to a Vote of Security Holders                  19

ITEM 5.  Other Information                                                    19

ITEM 6.  Exhibits                                                             20

SIGNATURES                                                                    21

                                       2
<PAGE>


ITEM 1.  FINANCIAL STATEMENTS.

BIONUTRICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

                                                    JANUARY 31,     OCTOBER 31,
                                                       2006            2005
                                                   ------------    ------------
ASSETS

CURRENT ASSETS:
  Cash and cash equivalents                        $    222,314    $    128,819
  Inventory                                               3,748           4,010
  Prepaid expenses and other current assets             122,900         137,609
                                                   ------------    ------------
                   Total Current Assets                 348,962         270,438
                                                   ------------    ------------

PROPERTY - Net of accumulated depreciation
  of $71,734 and $70,689, respectively                   16,538           4,513
                                                   ------------    ------------

OTHER ASSETS:
  Deposits on equipment                                 234,494         234,494
  Deposit on purchase agreement                         200,000         200,000
  Deferred financing fees                               546,283         375,042
  Capitalized acquisition costs                          85,218              --
  Patents - net of accumulated amortization
    of $320,391 and $312,816, respectively           14,592,575      14,600,149
  Investment in InCon Processing, LLC                 1,148,485       1,226,919
                                                   ------------    ------------
                   Total Other Assets                16,807,055      16,636,604
                                                   ------------    ------------

TOTAL                                              $ 17,172,555    $ 16,911,555
                                                   ============    ============

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable                                 $  1,135,524    $  1,007,570
  Notes payable - shareholders and others             1,424,052       1,452,100
  Accrued interest to shareholders and others           810,198         731,792
  Other accrued liabilities                             870,731         992,362
                                                   ------------    ------------
                   Total current liabilities          4,240,505       4,183,824
                                                   ------------    ------------

LONG-TERM LIABILITIES:
   Convertible bridge notes                           2,333,178       1,423,980
                                                   ------------    ------------

                   Total Liabilities                  6,573,683       5,607,804
                                                   ------------    ------------

                                       3
<PAGE>


STOCKHOLDERS' EQUITY
  Preferred stock - $.001 par value -
    authorized,  5,000,000 shares; 591,850 and
    591,850 issued and outstanding, respectively
    (liquidation preference of $798,998)                798,998         798,998
  Common stock - $.001 par value - authorized,
    45,000,000 shares; 22,681,725 and 22,681,725
    issued and outstanding, respectively                 22,681          22,681
  Additional paid-in capital                         54,955,735      54,802,634
  Warrants                                              852,175         511,650
  Accumulated deficit                               (46,030,717)    (44,832,212)
                                                   ------------    ------------
                   Total stockholders' equity        10,598,872      11,303,751
                                                   ------------    ------------

TOTAL                                              $ 17,172,555    $ 16,911,555
                                                   ============    ============

                                       4
<PAGE>


BIONUTRICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

                                                           THREE MONTHS
                                                         ENDED JANUARY 31,
                                                   ----------------------------
                                                       2006            2005
                                                   ------------    ------------
REVENUES:
     Revenue from product sales                    $      1,640    $      2,984
                                                   ------------    ------------

COST OF REVENUES                                            256             493
                                                   ------------    ------------

           Gross profit                                   1,384           2,491
                                                   ------------    ------------

OPERATING EXPENSES:
     Research and development                           160,848           3,360
     Selling, general and administrative                742,831         301,350
                                                   ------------    ------------

           Total operating expenses                     903,679         304,710
                                                   ------------    ------------

OPERATING LOSS                                         (902,295)       (302,219)
                                                   ------------    ------------

OTHER INCOME (EXPENSES):
     Equity in the loss of InCon Processing, LLC        (78,433)       (212,662)
     Recovery of previous write-down of accounts
       receivable  and other income                     110,000             444
     Interest expense, net                             (327,777)           (444)
                                                   ------------    ------------
           Total other (expenses) income               (296,210)       (212,662)
                                                   ------------    ------------

NET LOSS                                           $ (1,198,505)   $   (514,881)
                                                   ============    ============

BASIC AND DILUTED NET LOSS PER COMMON SHARE        $      (0.05)   $      (0.03)
                                                   ============    ============

WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING                                          22,681,725      16,022,508
                                                   ============    ============

                                       5
<PAGE>


BIONUTRICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

                                                           THREE MONTHS
                                                         ENDED JANUARY 31,
                                                   ----------------------------

                                                       2006            2005
                                                   ------------    ------------
OPERATING ACTIVITIES:
Net loss                                           $ (1,198,505)   $   (514,881)
Adjustments to reconcile net loss to cash
  used in operating activities:
  Depreciation and amortization                           8,619           7,865
  Equity in the loss of joint venture                    78,433         212,662
  Amortization of bridge loan discount                  191,584              --
  Changes in operating assets and liabilities:
      Inventory                                             263             511
      Prepaids and other current assets                  14,709        (106,148)
      Accounts payable                                  127,954         132,685
      Accrued liabilities                               (43,225)        (92,691)
                                                   ------------    ------------
Net cash used in operating activities                  (820,168)       (359,997)
                                                   ------------    ------------

INVESTING ACTIVITIES:
  Capital expenditures                                  (13,070)             --
  Deferred fees associated with
    acquisition activities                              (85,218)             --
                                                   ------------    ------------

Net cash provided by investing activities               (98,288)             --
                                                   ------------    ------------

FINANCING ACTIVITIES:
  Proceeds from debt                                  1,150,000              --
  Fees from debt issuance                              (110,001)             --
  Repayment of debt                                     (28,048)             --
                                                   ------------    ------------

Net cash provided by financing activities             1,011,951              --
                                                   ------------    ------------

NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS                                         93,495        (359,997)


CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD          128,819         629,257
                                                   ------------    ------------

CASH AND CASH EQUIVALENTS, END OF PERIOD           $    222,314    $    269,260
                                                   ============    ============

SUPPLEMENTAL DISCLOSURES OF NONCASH FINANCING
ACTIVITIES:
  Settlement of debt through issuance
    of common stock                                $          0    $     49,500
                                                   ============    ============

                                       6
<PAGE>


                                BIONUTRICS, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

Note A -      BASIS OF PRESENTATION

                     The accompanying unaudited Condensed Consolidated Financial
              Statements of Bionutrics,  Inc. (the "Company") have been prepared
              in accordance with accounting principles generally accepted in the
              United States of America for interim financial information and the
              instructions  to Form 10-Q.  Accordingly,  they do not include all
              the  information and footnotes  required by accounting  principles
              generally  accepted in the United  States of America for  complete
              financial   statements.   In  the  opinion  of   management,   all
              adjustments  (which  include  only normal  recurring  adjustments)
              necessary to present  fairly the  financial  position,  results of
              operations  and cash  flows for all  periods  presented  have been
              made. The results of operations for the  three-month  period ended
              January 31, 2006 are not  necessarily  indicative of the operating
              results  that may be expected  for the entire year ending  October
              31,  2006.  These  unaudited  condensed   consolidated   financial
              statements  should  be  read in  conjunction  with  the  Company's
              financial  statements and accompanying notes thereto as of and for
              the year  ended  October  31,  2005.  The  accompanying  condensed
              consolidated  financial  statements  have been prepared on a going
              concern basis,  which  contemplates  the realization of assets and
              the  satisfaction of liabilities in the normal course of business.
              The  Company  has  incurred   accumulated   operating   losses  of
              $46,030,717  through  January  31,  2006  which  have been  funded
              through  the  issuance of stock and debt.  The losses  incurred to
              date, the  uncertainty  regarding the ability to raise  additional
              capital and the Company's  inability to generate gross profits and
              positive cash flows from operations  indicate that the Company may
              not be able to continue as a going concern for a reasonable period
              of time.

Note B -      NET LOSS PER COMMON SHARE

                     Basic net loss per share is computed  by  dividing  the net
              loss by the weighted  average number of common shares  outstanding
              during the presented  periods.  Diluted net loss per share has not
              been presented as it was  anti-dilutive.  Options and warrants are
              excluded from the diluted net loss per share calculation,  as they
              are anti-dilutive.

Note C -      LICENSE AGREEMENT

                     The Technology License Agreement (the "License  Agreement")
              dated March 16, 2005 entered  into with  Nostrum  Pharmaceuticals,
              Inc  ("Nostrum")  and the  Company,  replaced in its  entirety the
              Product  Development  and License  Agreement  dated as of June 16,
              2004. Under the revised License Agreement, the Company received an
              exclusive  license  to develop  and  commercialize  ten  505(b)(2)
              products  (brandable  pharmaceutical  products  that  qualify  for
              filing with the United  States Food and Drug  Administration  (the
              "FDA") under a "505(b)(2)"  application)  and ten generic products
              (generic  bio-equivalents  of branded

                                       7
<PAGE>


              products  which  qualify  for filing  with the FDA  pursuant to an
              Abbreviated  New Drug  Application)  under the Nostrum  Technology
              within a three  year  period.  As  consideration  for the  License
              Agreement,  the  Company  issued 12  million  shares of its common
              stock, and agreed to pay Nostrum royalties on net sales of generic
              products equal to 50% of gross profit. As of January 31, 2006, the
              Company  has  paid  $1,615,090  to  Nostrum  as  remuneration  for
              research  and  development  costs  associated  with  the  licensed
              technology.

Note D -      PURCHASE AGREEMENT

                     In July 2005, the Company entered into a Purchase Agreement
              (the "Purchase Agreement") to acquire Kirk  Pharmaceuticals,  LLC,
              and its  affiliate,  ANDAPharm,  LLC  (collectively,  "Kirk")  for
              $12,000,000 in cash and a promissory note. Kirk is a Florida based
              pharmaceutical company that manufactures  over-the-counter ("OTC")
              and  generic  prescription  drugs  in its  FDA  and  DEA  approved
              facility.  Kirk currently manufactures and/or markets 30 OTC solid
              dose and soft gel pharmaceuticals under current Good Manufacturing
              Practices  ("cGMP")  guidelines.  Kirk was founded in 1999 and has
              grown to more than 100 people and occupies  70,000  square feet of
              manufacturing   space.   If  the  Company  is  successful  in  its
              acquisition  of Kirk,  the  Company  intends  to fund  some of its
              planned  clinical  trials and product  development  programs  with
              potential   cash  flow  from   Kirk's   operations.   The  Company
              anticipates  that  Kirk  will  be  the  designated   manufacturing
              facility for its products,  subsequent to FDA approval.  As of the
              date herein,  the Company is awaiting  approval of the acquisition
              from the Drug Enforcement Agency ("DEA").

Note E -      PLACEMENT AGENCY AGREEMENT

                     On September 27, 2005, the Company entered into a Placement
              Agency  Agreement with Indigo  Securities LLC, a Delaware  limited
              liability company ("Indigo") whereby,  Indigo agreed to act as the
              Registrant's  agent  in  connection  with  (i)  the  sale  by  the
              Registrant of from $5,000,000 to $10,000,000 million,  face amount
              of the  Company's 10% Senior  Notes,  to be offered  together with
              warrants, (ii) the sale (the "Bridge Financing") by the Company of
              up to  $2,500,000,  face amount of the  Company's  9%  Convertible
              Bridge Notes (the "Bridge  Notes"),  to be offered  together  with
              warrants (the "Bridge Warrants") and (iii) the sale by the Company
              of up to $5  million  of  Series  A  Convertible  Preferred  Stock
              ("Series  A  Preferred   Stock")  of  the  Company  together  with
              warrants,  all of which will be  offered  on terms and  conditions
              agreed upon by the Parties. As of the date herein, the Company has
              issued $3,095,000 under the 9% Convertible Bridge Notes. No Series
              A Convertible Preferred Stock has been issued.

Note F -      PURCHASE AND SALE AGREEMENT

                     InCon Technologies,  Inc., a wholly-owned subsidiary of the
              Company,    and   Asia   Pacific   Investment   Holdings   Limited
              (collectively,  the  "Sellers"),  entered into a Purchase and Sale
              Agreement,   dated  as  of  October   31,   2005  (the   "Purchase
              Agreement"),  pursuant to which the  Sellers  agreed to sell their

                                       8
<PAGE>


              respective  fifty  percent  (50%)  ownership  interests  in  InCon
              Processing,  LLC  ("InCon"),  to  InCon  International,   Inc.  in
              exchange for all of the  membership  units of Bali  Holdings,  LLC
              ("Bali")  which are owned by N.P.  Shaikh  ("Shaikh")  and John R.
              Palmer   ("Palmer").   The  sale  was  made  upon  the   Company's
              determination that InCon's operations,  which includes high vacuum
              distillation,  production toll work and process development, would
              no longer  comprise a material  element in the Company's  business
              strategy.

                     Pursuant to the Purchase Agreement, the Sellers have agreed
              to provide  consulting  services  to InCon for a term of three (3)
              years in consideration  for an annual consulting fee in the amount
              of the lesser of: (a) One Hundred Thousand  Dollars  ($100,000.00)
              and (b)  twenty-five  percent  (25%) of  InCon's  annual  earnings
              before interest,  taxes,  depreciation  and amortization  over the
              five (5) years beginning on October 31, 2005  ("Consulting  Fee");
              provided  however,  that the total payments to each of the Sellers
              in respect of the  Consulting  Fee shall not exceed Three  Hundred
              Thousand Dollars  ($300,000.00).  The Consulting Fee is subject to
              certain  acceleration  provisions  as  provided  in  the  Purchase
              Agreement.

                     As a  condition  to  the  Closing  of  the  sale  of  InCon
              membership   interests,   InCon  is   obligated  to  complete  the
              development  of certain  tocotrienol  processing  technology  (the
              "Technology") and to convey the sole right, ownership and interest
              in the  Technology  to the Sellers who shall  thereafter  have the
              exclusive  right to patent,  license or sell the Technology in its
              sole discretion. While management believes that InCon will deliver
              the technology, no assurance can be given that the technology will
              be received or that the sale will be consummated.

Note G -      FINANCING COMMITMENT

                     In November,  2005, the Company  received a commitment from
              BHC Interim Funding II L.P., a merchant  banking firm ("BHC"),  to
              lend up to $10 million to a newly-formed subsidiary of the Company
              for  the  purpose  of  acquiring  Kirk.  Funding  pursuant  to the
              Commitment   is  subject   to   satisfactory   legal   review  and
              documentation,  no material adverse changes, as well as additional
              terms  and   conditions.   The  loan  from  BHC  (the  "Loan")  is
              anticipated  to be structured as senior secured  indebtedness,  of
              which  $8,000,000  will be drawn at closing (the "Initial  Loan"),
              and an incremental  $2,000,000 credit facility (the "Facility") to
              be available  on the six month  anniversary  of the  closing.  The
              Facility  will  constitute  an  additional  draw  under  the  loan
              documents.  The Loan will have an interest  rate of 12% per annum,
              payable  monthly  in  arrears,  and will  mature on the date three
              years  from the date of the  closing of the  acquisition  of Kirk.
              There will also be a maintenance fee,  adjusted  periodically,  to
              achieve an accrual  rate of 4.75%.  The Loan is not  subject to an
              amortization schedule and may be prepaid at any time. In the event
              the  Loan is not  paid in full at  maturity,  notwithstanding  any
              other  penalties  that  may be  paid,  and  notwithstanding  BHC's
              rights,  actions  and  efforts to pursue  repayment,  the  Company
              shall,  among other things,  after a 15-day cure period pay a cash
              fee of 5.0% of the amount then outstanding to BHC.

                                       9
<PAGE>


                     The Company will be required to utilize the proceeds of any
              new senior or  subordinated  debt or equity or other new financing
              by or investment in the Company,  as well as the proceeds from the
              sale of any assets outside the ordinary  course of business or the
              sale or merger of the Company to repay the Investment.

                     The Company shall be required to pay a 3.0% transaction fee
              based  upon  the  amount  funded  and,   upon   repayment  of  the
              Investment,  will be required to pay maintenance  fees prorated to
              reflect the time and principal amount of the Investment.

                     The Loan shall be secured by a first  priority  lien on all
              existing and future tangible and intangible  assets owned by Kirk.
              Notwithstanding  the  foregoing,  the  Loan  will  have  a  second
              priority lien on specific  tangible assets that, after the closing
              of the acquisition of Kirk, are financed with equipment loans. The
              Loan  will be  further  secured  by:  (i) a pledge  of 100% of the
              Company's interest in Kirk; (ii) a pledge of 100% of the Company's
              interest in ANDAPharm,  LLC, (iii) the corporate guarantees of the
              Company and ANDAPharm,  LLC, and (iv) a first priority lien on the
              Company's  technology,  including  its  products  derived from its
              license agreement with Nostrum Pharmaceuticals,  Inc. However, the
              lien granted to BHC shall not  preclude the Company from  entering
              into  agreements  related to its technology in the ordinary course
              of business, so long as no event of default has occurred under the
              loan documents.

                     Further,  upon the  closing of the Loan,  BHC will have the
              right to a 5-year warrant to purchase  shares of 125,000 shares of
              common  stock of the  Company  for $4.00 per  share,  subject to a
              number of conditions.

                     While the Initial Loan is  outstanding,  BHC shall (a) have
              observation  rights  to Board of  Directors  and  Audit  Committee
              meetings  of  the  Company  and  Kirk,  (b)  be  given  reasonable
              notification of such meeting dates, and (c) be entitled to receive
              copies of all  written  information  and  notices  provided to the
              Board of  Directors  and Audit  Committee  at the same time as the
              members.  In the event of a payment default under the Initial Loan
              and the  Facility  which is not  cured in 15  days,  BHC  would be
              entitled  to appoint one person to the Board of  Directors  of the
              Company.

                     In the event that the Company determines not to utilize the
              Loan there shall be a $75,000 break-up fee.

Note H -      LEASED FACILITIES

                     In November 2005,  the Company  entered in to a sub-leasing
              agreement for approximately  1,208 square feet of office space for
              its research and technology  development staff in Edison, NJ, with
              monthly payments of $2,750.  The agreement expires on September 9,
              2007.

                                       10
<PAGE>


                     In  January  2006,  the  Company  entered  in  to  a  lease
              agreement  for  its  principal  executive  offices  consisting  of
              approximately 1,561 square feet, in Phoenix, Arizona under a three
              year lease agreement that expires on January 1, 2009, with monthly
              payments of $4,659.

Note I -      SUBSEQUENT OR SIGNIFICANT EVENTS

                     On  February  3,  2006,  the  Company  filed a  Preliminary
              Information  Statement  with the SEC for a name change to Synovics
              Pharmaceuticals, Inc. The Company waited the requisite 10 days for
              comments from the SEC, of which it received none. The Company then
              filed on March 2, 2006 a Definitive  Information  Statement filing
              with  the  SEC  and  a  mailing   of  a  copy  of  the  filing  to
              shareholders.

                     In February 2006, the Company completed a private placement
              of convertible notes and warrants (the "February Financing").  The
              gross  proceeds  of  the  February   Financing  totaled  $100,000.
              Pursuant to the February Financing, the Company issued $100,000 of
              principal  amount  of  9%  convertible   notes  (the  "Convertible
              Notes"),  which are convertible into an aggregate of 33,333 shares
              of  Company  common  stock at a price of $3.00,  and  warrants  to
              purchase an aggregate of 16,666 shares of Company  common stock at
              $4.00 per share (the  "Private  Warrants").  These  Warrants  were
              valued at $32,583 using the Black Scholes  Model,  assuming a life
              of three years, volatility of 550%, and a risk free borrowing rate
              of 3.25% and will be charged to interest  expense over the life of
              the debt  commencing in 2006. In connection  with this  financing,
              the Company paid a cash private placement fee of $9,000.

                                       11
<PAGE>


                                BIONUTRICS, INC.

ITEM 2.       MANAGEMENT'S  DISCUSSION  AND ANALYSIS OF FINANCIAL  CONDITION AND
              RESULTS OF OPERATIONS

THE FOLLOWING  DISCUSSION OF THE  COMPANY'S  FINANCIAL  CONDITION AND RESULTS OF
OPERATIONS  INCLUDES  CERTAIN  FORWARD-LOOKING  STATEMENTS.  WHEN  USED  IN THIS
REPORT,  THE WORDS "EXPECTS,"  "INTENDS,"  "PLANS" AND "ANTICIPATES" AND SIMILAR
TERMS ARE  INTENDED TO IDENTIFY  FORWARD-LOOKING  STATEMENTS  THAT RELATE TO THE
COMPANY'S FUTURE  PERFORMANCE.  SUCH STATEMENTS INVOLVE RISKS AND UNCERTAINTIES.
THE COMPANY'S  ACTUAL RESULTS MAY DIFFER  MATERIALLY FROM THE RESULTS  DISCUSSED
HERE.  FACTORS THAT MIGHT CAUSE SUCH A DIFFERENCE  INCLUDE,  BUT ARE NOT LIMITED
TO, THOSE DISCUSSED UNDER "RISK FACTORS" IN THE COMPANY'S FORM 10-K.

OUR BUSINESS

       Bionutrics,  Inc. is a pharmaceutical company focusing on the development
of  oral   controlled-release   drug  formulations  utilizing  proprietary  drug
formulations  and delivery  technologies.  The Company has licensed  proprietary
oral-control  release  technology  with the  rights to develop  exclusively  and
worldwide,  ten  generic  and ten  505(b)(2)  drugs  (improved  formulations  of
previously  approved  drugs).  The Company intends to invest the majority of its
resources in the development and  commercialization of these products during the
next few years.

GENERAL

       The  Company  is a  development  stage  company  and  is  anticipating  a
prolonged  period of losses  and  negative  cash  flows  while it  develops  and
commences  commercialization  of its  planned  products.  The  Company's  future
operating results will depend largely on its ability to achieve the following:

       -  Debt and equity  financing  to support the  research  and  development
          activities

       -  Successful completion of the Kirk acquisition

       -  Successful development and testing of product candidates

       -  Receipt of required regulatory approvals related to product candidates

       -  Commercialization of the Company's products

       -  Gaining a competitive position in the market

DEVELOPMENTS DURING THREE MONTHS ENDED JANUARY 31, 2006

       In January 2006, the Company  announced that it has initiated the process
for  its  first  controlled-release  generic  drug  candidate,   SNG1001a,  with
chemical,  manufacturing  and control  ("CMC")  development.  Concurrently,  the
Company will conduct pivotal biostudies to demonstrate  "bioequivalency"  as the
Company moves this first product  towards  commercialization.  These efforts are
intended to provide  confirmation of the  formulation and biostudies  previously
undertaken in India.  Successful  completion of these efforts is  anticipated to
result in the Company's first  Abbreviated New Drug Application  ("ANDA") filing
with the

                                       12
<PAGE>


FDA.  SNG1001a is a formulated  generic version of a branded drug in a treatment
category with annualized US sales in excess of $1.4 billion  (Source:  IMS). The
Company can provide no assurance that its clinical trials will prove  successful
or that it will demonstrate  sufficient evidence to file an ANDA filing with the
FDA.

FOCUS FOR REMAINDER OF 2006

       The  Company's  primary  focus  for  the  remainder  of  2006  will be to
consummate the acquisition of Kirk  Pharmaceuticals and its affiliate ANDAPharm.
The Company will also  continue its efforts to secure debt and equity  financing
to support operations,  further its "bioequivalency"  study of SNG1001a, as well
as to further its research and  development  program on other drug candidates in
order to be in a position to realize the potential of its licensed technology.

RESULTS OF OPERATIONS

THREE MONTHS ENDED JANUARY 31, 2006 COMPARED WITH THREE MONTHS ENDED JANUARY 31,
2005.

       Consolidated  gross  revenues for the quarter  ended January 31, 2006 was
$1,600 compared to $3,000 for the same quarter in 2005.

       The Company has been  unprofitable  since  inception,  and  continues  to
generate  limited  revenue  as  the  Company's  subsidiary,   Bionutrics  Health
Products, sells through its remaining evolvE(R) inventory, a product which is no
longer  being  marketed  or  developed  due to the  Company's  shift in business
strategy from the discovery and  development  of  pharmaceutical  and functional
nutrition   products  to  the  development  of  oral   controlled-release   drug
formulations  utilizing proprietary drug formulation and delivery  technologies.
The Company does not anticipate sales from evolvE(R) beyond this fiscal year.

       The Company expects to continue to incur  operating  losses as it invests
in product  development  and clinical trials  research.  The Company is pursuing
potential  development  and  marketing  arrangements  with other  pharmaceutical
companies  regarding its licensed products.  However,  there can be no assurance
that the Company will be  successful  in these  efforts or that any  arrangement
would generate sufficient revenue to fund operations.

       Cost of revenues  for the three  months  ended  January 31, 2006 was $250
compared to $500 for the same three months in 2005.

       Research and development  expenses for the three months ended January 31,
2006 was  $161,000  compared to $3,000 for the same three  months in 2005.  This
increase is due to the remuneration of research and development costs associated
with the Nostrum  licensed  technology  of $107,000,  as well as $54,000 in fees
associated with the development of SNG1001a.

       Operating  expenses  for the three  months  ended  January  31,  2006 was
$747,000  compared to $305,000.  This  increase is due  primarily to $261,000 in
additional salary expense for

                                       13
<PAGE>


increased staffing needs, $127,000 in recruiting fees, and $56,000 in additional
consulting  expense,  all of which are  necessary to  accomplish  the  Company's
business objectives and increased business activities.

       The Company's  loss in the results of operations  for it's  investment in
joint  venture,  which is accounted for using the equity  method,  for the three
months ended January 31, 2006, was $78,000. The Company records its share of the
joint venture's loss for the quarter as a decrease in its investment.

       The net loss of  $1,199,000  or $.05 per share for the three months ended
January  31,  2006 was due  primarily  to the  Company's  inability  to generate
sufficient cash flow to support operations.  The Company also expects cumulative
losses to increase due to its research and development activities related to the
License Agreement with Nostrum.

LIQUIDITY AND CAPITAL RESOURCES

       To date, the Company's  operations have not generated sufficient revenues
to satisfy the Company's  operating  capital needs. The Company has financed its
operations primarily through the sale of its common stock,  warrants and debt by
means of  private  placements.  The  Company  had a working  capital  deficit of
approximately  $3,892,000  at January 31, 2006 as compared  with  $3,913,000  at
October 31, 2005. Cash and cash  equivalents  were $222,000 at January 31, 2006,
as compared with $129,000 at October 31, 2005, an increase of $93,000.

       Net cash used in operating activities during the three-month period ended
January 31, 2006 was  $820,000.  This  resulted  from the  Company's net loss of
$1,199,000,  offset in part by certain  non-cash items  attributable to expenses
including,  but not limited to a reduction of its investment in InCon Processing
of $78,000,  amortization  of bridge note  discount  of  $192,000,  depreciation
expense of $9,000, and an increase in accounts payable of $128,000.  The Company
has generally  incurred  negative cash flows from  operations  since  inception,
which will continue due to research and  development  activities  related to the
License Agreement with Nostrum.

       Net cash used in  investing  activities  during  the three  months  ended
January 31,  2006 was  $98,000.  This  resulted  from  capital  expenditures  of
equipment of $13,000 and deferred fees associated  with the Kirk  acquisition of
$85,000.

       Net cash provided by financing  activities  during the three months ended
January 31, 2006 was  $1,012,000,  which  resulted  from the proceeds of debt of
$1,150,000,  less fees  associated  with the debt  issuance of $110,000  and the
repayment of $28,000 in debt.

       The  Company  did  not  enter  into  any  material  capital   expenditure
agreements,  nor did it engage in any off  balance  sheet  financing  during the
reporting period.

The following  table depicts our  obligations  and commitments as of January 31,
2006 to make future payments under existing contracts or contingent commitments.

                                       14
<PAGE>


<TABLE>
<CAPTION>
                                                              PAYMENTS DUE BY PERIOD

                                                      LESS THAN                                 AFTER
CONTRACTUAL OBLIGATIONS                    Total        1 YEAR       1-3 YEARS    4-5 YEARS    5 YEARS
                                        ----------    ----------    ----------    ---------    --------
<S>                                     <C>           <C>           <C>           <C>          <C>
Short - Term Debt Obligations
  includes interest through 01/31/06    $2,564,745    $2,564,745        $0           $0           $0
Long - Term Obligations includes
  interest through maturity              3,333,311             0     3,333,311        0            0
Total                                   $5,898,056    $2,564,745    $3,333,311       $0           $0
</TABLE>


       In  November  2005,  the  Company   completed  a  private   placement  of
convertible notes and warrants (the "November Financing"). The gross proceeds of
the November Financing totaled $450,000. Pursuant to the November Financing, the
Company issued $450,000 of principal amount of 9% convertible  notes,  which are
convertible  into an  aggregate of 150,000  shares of Company  common stock at a
price of $3.00 per share, and warrants to purchase an aggregate of 74,999 shares
of  Company  common  stock at $4.00 per share.  These  warrants  were  valued at
$132,351  using  the  Black  Scholes  Model,  assuming  a life of  three  years,
volatility of 550%, and a risk free borrowing rate of 3.375% and will be charged
to interest  expense over the life of the debt commencing in 2005. In connection
with this  financing,  the Company paid a cash private  placement fee of $40,500
and incurred approximately $1,300 in indirect fees consisting of primarily legal
expenses.  This will also be amortized and charged to interest  expense over the
life of the debt.

       In  December  2005,  the  Company   completed  a  private   placement  of
convertible notes and warrants (the "December Financing"). The gross proceeds of
the December Financing totaled $200,000. Pursuant to the December Financing, the
Company issued $200,000 of principal amount of 9% convertible  notes,  which are
convertible  into an  aggregate  of 66,666  shares of Company  common stock at a
price of $3.00 per share, and warrants to purchase an aggregate of 33,333 shares
of  Company  common  stock at $4.00 per share.  These  warrants  were  valued at
$68,852  using  the  Black  Scholes  Model,  assuming  a life  of  three  years,
volatility of 550%, and a risk free borrowing rate of 3.375% and will be charged
to interest  expense over the life of the debt commencing in 2005. In connection
with this financing,  the Company paid a cash private  placement fee of $18,000,
which will also be  amortized  and charged to interest  expense over the life of
the debt.

       In January 2006, the Company completed a private placement of convertible
notes and warrants (the "January Financing").  The gross proceeds of the January
Financing  totaled  $500,000.  Pursuant  to the January  Financing,  the Company
issued  $500,000  of  principal  amount  of  9%  convertible  notes,  which  are
convertible  into an  aggregate of 166,666  shares of Company  common stock at a
price of $3.00 per share, and warrants to purchase an aggregate of 83,332 shares
of  Company  common  stock at $4.00 per share.  These  warrants  were  valued at
$139,322  using  the  Black  Scholes  Model,  assuming  a life of  three  years,
volatility of 550%,  and a risk free borrowing rate of 3.25% and will be charged
to interest  expense over the life of the debt commencing in 2005. In connection
with this financing,  the Company paid a cash private  placement fee of $45,000,
and incurred  approximately  $29,000 in indirect  fees  consisting  primarily of
legal expenses.

                                       15
<PAGE>


       In  February  2006,  the  Company   completed  a  private   placement  of
convertible notes and warrants (the "February Financing"). The gross proceeds of
the February Financing totaled $100,000. Pursuant to the February Financing, the
Company issued $100,000 of principal amount of 9% convertible  notes,  which are
convertible  into an  aggregate  of 33,333  shares of Company  common stock at a
price of $3.00 per share, and warrants to purchase an aggregate of 16,666 shares
of  Company  common  stock at $4.00 per share.  These  warrants  were  valued at
$32,583  using  the  Black  Scholes  Model,  assuming  a life  of  three  years,
volatility of 550%,  and a risk free borrowing rate of 3.25% and will be charged
to interest  expense over the life of the debt commencing in 2006. In connection
with this financing, the Company paid a cash private placement fee of $9,000.

FUTURE CAPITAL REQUIREMENTS

       All of the  Company's  product  candidates  are in the  early  stages  of
research and development,  and will require  additional  research,  development,
clinical  testing,   regulatory  approval,   and  a  commitment  of  significant
additional resources prior to commercialization.  Based on its current operating
plan,  the Company has  sufficient  capital  resources  to meet its  obligations
through the second quarter of 2006. The Company requires  additional  funding in
order to move forward with our research and  development  plan.  The Company has
reasonable assumptions that additional debt or equity financing may be available
under its Placement Agency  Agreement with Indigo Ventures,  LLC, however it can
provide no assurance  that such funding will be obtained.  The Company's  future
capital requirements will depend on many factors, including the following:

       -  Continued  scientific  progress in its  research,  drug  discovery and
          development plans

       -  Size of its program and progress with clinical trials

       -  Time and costs associated with regulatory approvals

       -  Recruitment of key management

REGULATORY APPROVAL

       The Company must conduct  time-consuming  and costly  clinical  trials to
show  safety and  efficacy in each of its  product  candidates  before a product
candidate  may be  approved  for  distribution.  The  clinical  trials  must  be
conducted in accordance with the FDA  regulations.  If the FDA believes that the
Company has not  sufficiently  demonstrated  safety and  efficacy in its product
candidates,  it will not  approve  them,  or will  require  additional  clinical
studies,  which will require additional time and resources.  The Company may not
be able to obtain the necessary  regulatory  approval on a timely  basis,  if at
all, for any of its product  candidates.  Failure to receive these  approvals or
delays in the approvals may prevent or delay commercialization of a product, and
as a result,  could negatively impact the Company's ability to generate revenue.
The Company can give no assurances  that any of its product  candidates  will be
safe and effective, will be approved for  commercialization,  or that it will be
successful in the commercialization of these products.

                                       16
<PAGE>


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

       The  Company  does  not  invest  in or  own  any  market  risk  sensitive
instruments entered into for trading purposes or for purposes other than trading
purposes.  All loans to the Company  have been made with fixed  interest  rates,
and, accordingly,  the market risk to the Company prior to the maturity of those
instruments is minimal.

ITEM 4.  CONTROLS AND PROCEDURES.

       The Company's  management is responsible for establishing and maintaining
a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and
15d-15(e)  under the Exchange  Act) that is designed to ensure that  information
required to be disclosed by the Company in the reports that the Company files or
submits under the Exchange Act is recorded, processed,  summarized and reported,
within  the  time  periods  specified  in  the  Commission's  rules  and  forms.
Disclosure  controls and procedures include,  without  limitation,  controls and
procedures  designed to ensure that  information  required to be disclosed by an
issuer  in the  reports  that it files or  submits  under  the  Exchange  Act is
accumulated and communicated to the issuer's management, including its principal
executive officer or officers and principal  financial  officer or officers,  or
persons performing  similar functions,  as appropriate to allow timely decisions
regarding required disclosure.

       In accordance  with  Exchange Act Rules 13a-15 and 15d-15,  an evaluation
was completed under the supervision and with the  participation of the Company's
management,  including  the Company's  President,  Chief  Financial  Officer and
Secretary,  of the  effectiveness  of the design and  operation of the Company's
disclosure  controls and  procedures as of the end of the period covered by this
Annual Report. Based on that evaluation,  the Company's management including the
President,  Chief Financial Officer and Secretary,  concluded that the Company's
disclosure controls and procedures are effective to provide reasonable assurance
that  information  required to be disclosed in the  Company's  reports  filed or
submitted  under  the  Exchange  Act is  recorded,  processed,  summarized,  and
reported within the time periods specified in the Commission's  rules and forms.
There have been no  significant  changes to the Company's  internal  controls or
other factors that could  significantly  affect internal controls  subsequent to
the period covered by this Annual Report.


                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

       The  Company  is not  party  to any  legal  proceedings  that  management
believes would have a material adverse effect on the business of the Company.

ITEM 1A. RISK FACTORS.

       The Company has had no material changes to its risk factors as previously
disclosed in its Form 10-K filed with the Securities and Exchange  Commission on
January 30, 2006.

                                       17
<PAGE>


ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

       In November 2005, the Company completed the November Financing. The gross
proceeds of the November  Financing totaled  $450,000.  Pursuant to the November
Financing,  the Company  issued  $450,000 of principal  amount of 9% convertible
notes,  which are  convertible  into an aggregate  of 150,000  shares of Company
common  stock at a price  of $3.00  per  share,  and  warrants  to  purchase  an
aggregate of 74,999  shares of Company  common  stock at $4.00 per share.  These
warrants were valued at $132,351 using the Black Scholes Model,  assuming a life
of three years, volatility of 550%, and a risk free borrowing rate of 3.375% and
will be charged to  interest  expense  over the life of the debt  commencing  in
2005.  In  connection  with this  financing,  the  Company  paid a cash  private
placement  fee of $40,500 and  incurred  approximately  $1,300 in indirect  fees
consisting of primarily legal expenses.  This will also be amortized and charged
to  interest  expense  over the life of the debt.  The  November  Financing  was
conducted in  accordance  with Section 4(2) of the  Securities  Act of 1933,  as
amended,  (the  "Securities  Act")  and  Rule  506 of  Regulation  D  under  the
Securities Act.

       In December 2005, the Company completed the December Financing. The gross
proceeds of the December  Financing totaled  $200,000.  Pursuant to the December
Financing,  the Company  issued  $200,000 of principal  amount of 9% convertible
notes,  which are  convertible  into an  aggregate  of 66,666  shares of Company
common  stock at a price  of $3.00  per  share,  and  warrants  to  purchase  an
aggregate of 33,333  shares of Company  common  stock at $4.00 per share.  These
warrants were valued at $68,852 using the Black Scholes  Model,  assuming a life
of three years, volatility of 550%, and a risk free borrowing rate of 3.375% and
will be charged to  interest  expense  over the life of the debt  commencing  in
2005.  In  connection  with this  financing,  the  Company  paid a cash  private
placement  fee of $18,000,  which will also be amortized and charged to interest
expense  over the life of the debt.  The  December  Financing  was  conducted in
accordance  with Section 4(2) of the Securities Act and Rule 506 of Regulation D
under the Securities Act.

       In January 2006, the Company completed the January  Financing.  The gross
proceeds  of the January  Financing  totaled  $500,000.  Pursuant to the January
Financing,  the Company  issued  $500,000 of principal  amount of 9% convertible
notes,  which are  convertible  into an aggregate  of 166,666  shares of Company
common  stock at a price  of $3.00  per  share,  and  warrants  to  purchase  an
aggregate of 83,332  shares of Company  common  stock at $4.00 per share.  These
warrants were valued at $139,322 using the Black Scholes Model,  assuming a life
of three years,  volatility of 550%, and a risk free borrowing rate of 3.25% and
will be charged to  interest  expense  over the life of the debt  commencing  in
2005.  In  connection  with this  financing,  the  Company  paid a cash  private
placement fee of $45,000,  and incurred  approximately  $29,000 in indirect fees
consisting  primarily of legal expenses.  The January Financing was conducted in
accordance  with Section 4(2) of the Securities Act and Rule 506 of Regulation D
under the Securities Act.

       In February 2006, the Company completed the February Financing. The gross
proceeds of the February  Financing totaled  $100,000.  Pursuant to the February
Financing,  the Company  issued  $100,000 of principal  amount of 9% convertible
notes,  which are  convertible  into an  aggregate  of 33,333  shares of Company
common stock at a price of $3.00 per share, and

                                       18
<PAGE>


warrants to purchase an  aggregate of 16,666  shares of Company  common stock at
$4.00 per share.  These  warrants were valued at $32,583 using the Black Scholes
Model,  assuming  a life of three  years,  volatility  of 550%,  and a risk free
borrowing rate of 3.25% and will be charged to interest expense over the life of
the debt commencing in 2006. In connection with this financing, the Company paid
a cash private placement fee of $9,000.  The February Financing was conducted in
accordance  with Section 4(2) of the Securities Act and Rule 506 of Regulation D
under the Securities Act.

       The proceeds from the Placement Agency Agreement with Indigo were used to
fund operations,  maintain  compliance with the periodic filing  requirements of
the  Securities  and Exchange  Commission,  as well as to further the  Company's
acquisition of Kirk Pharmaceuticals, LLC and its affiliate ANDAPharm, LLC.

       All  purchasers  represented  that they acquired the securities for their
own  accounts.  A legend was placed on the stock  certificates  stating that the
securities have not been registered  under the Securities Act and cannot be sold
or  otherwise  transferred  without an  effective  registration  or an exemption
therefrom.  All  purchasers of the Company's  securities  are either  accredited
investors or employees of the Company.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

       None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

       None.

ITEM 5.  OTHER INFORMATION.

       InCon Technologies,  Inc., a wholly-owned  subsidiary of the Company, and
Asia Pacific Investment Holdings Limited (collectively,  the "Sellers"), entered
into a Purchase and Sale Agreement,  dated as of October 31, 2005 (the "Purchase
Agreement"), pursuant to which the Sellers agreed to sell their respective fifty
percent (50%) ownership interests in InCon Processing,  LLC ("InCon"),  to InCon
International,  Inc.  in  exchange  for  all of the  membership  units  of  Bali
Holdings,  LLC ("Bali")  which are owned by N.P.  Shaikh  ("Shaikh") and John R.
Palmer  ("Palmer").  The sale was made  upon the  Company's  determination  that
InCon's  operations,  which includes high vacuum  distillation,  production toll
work and process development, would no longer comprise a material element in the
Company's business strategy.

       Pursuant to the  Purchase  Agreement,  the Sellers have agreed to provide
consulting  services to InCon for a term of three (3) years in consideration for
an  annual  consulting  fee in the  amount of the  lesser  of:  (a) One  Hundred
Thousand  Dollars  ($100,000.00)  and (b)  twenty-five  percent (25%) of InCon's
annual earnings before interest,  taxes,  depreciation and amortization over the
five (5) years  beginning  on October  31,  2005  ("Consulting  Fee");  provided
however,  that the total  payments  to each of the  Sellers  in  respect  of the
Consulting Fee shall not exceed Three Hundred  Thousand  Dollars  ($300,000.00).
The Consulting Fee is subject to certain acceleration  provisions as provided in
the Purchase Agreement.

                                       19
<PAGE>


       As a condition to the Closing of the sale of InCon membership  interests,
InCon is obligated to complete the development of certain tocotrienol processing
technology  (the  "Technology")  and to convey  the sole  right,  ownership  and
interest  in the  Technology  to the  Sellers  who  shall  thereafter  have  the
exclusive  right  to  patent,  license  or  sell  the  Technology  in  its  sole
discretion. While management believes that InCon will deliver the technology, no
assurance  can be given that the  technology  will be  received or that the sale
will be consummated.

ITEM 6.  EXHIBITS.

       (a)    Exhibits

              10.1.  Form of  Purchase  and  Sale  Agreement  by and  among  the
                     Company,  Asia Pacific Investment  Holdings Limited,  InCon
                     Technologies,  Inc., Bali Holdings,  LLC, InCon Processing,
                     LLC, InCon  International,  Inc.,  N.P.  Shaikh and John R.
                     Palmer, dated as of October 31, 2005.

              10.2   Form of Consent of Noteholders of Bionutrics, Inc.

              31.1   Certification of Chief Executive  Officer pursuant to Rules
                     13a-14(a) and 15d-14(a) of the Securities Exchange Act

              31.2   Certification of Chief Financial  Officer pursuant to Rules
                     13a-14(a) and 15d-14(a) of the Securities Exchange Act

              32.1   Certification  of Chief  Executive  Officer  pursuant to 18
                     U.S.C.  Section 1350, as adopted pursuant to Section 906 of
                     the Sarbanes-Oxley Act of 2002

              32.2   Certification  of Chief  Financial  Officer  pursuant to 18
                     U.S.C.  Section 1350, as adopted pursuant to Section 906 of
                     the Sarbanes-Oxley Act of 2002

       (b)    Reports on Form 8-K

              (1)    Form 8-K filed on March 7,  2006  regarding  the  Company's
                     intent to change its name to Synovics Pharmaceuticals, Inc.

              (2)    Form  8-K  filed  on  January   19,  2006   regarding   the
                     commencement of Chemical, Manufacturing, and Control of the
                     Company's first controlled-release generic drug candidate.

              (3)    Form 8-K filed on  November 7, 2005  regarding  the Company
                     receiving a commitment  from BHC Interim  Funding to invest
                     $10.0   Million   to   fund   the   Acquisition   of   Kirk
                     Pharmaceuticals.

                                       20
<PAGE>


                                BIONUTRICS, INC.

                                    SIGNATURE

       Pursuant to the requirements of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                        BIONUTRICS, INC.
                                        (Registrant)



Date:  March 16, 2006                   By: /s/ Ronald H. Lane
                                            --------------------------------
                                            Ronald H. Lane
                                            (President, Chief Executive Officer,
                                            Principal Accounting Officer and
                                            Chairman of the Board)


                                       21